Globalisation Flashcards
What is Globalisation?
How countries become closely integrated, this can be economically, socially, politically or culturally and how the world is slowly becoming a global communitiy
How does globalisation affect the world?
Changes distance and time, people can interact, the world feels like it’s shrinking, connections are being formed with places that are far apart, the connections are becoming deeper
Why are TNCs and new markets causing globalisation to accelerate?
TNCs: produce, sell or are located in 2 or more countries, generate huge sums of money, have GDP greater than most countries, bring investment, spread technology, promote cultures, job creating + capital + technology = political influence
NM: as RICs/NICs improve GDP and living standards, new markets have emerged. Global share trading has expanded into RICs (Mumbai/Shanghai), growth of new markets (particularly China/India), present opportunities for growth
Why are improved communications and International Organisations causing globalisation to accelerate?
IC: (transport/information exchanges), transport speeds increasing means people have access to more products and are better connected, Electronic communications allow instant exchange of information, people can interact all over the globe (shrinking world)
IO: bring money, people and information together, World Bank offers money to poorer nations to develop/help attract investment, IMF regulate trade between countries to encourage greater global trade
What are LEDCs?
Least developed countries, around 50 countries (Ethiopia), low incomes, weak economy, low education provision, high debt levels, economy based on agriculture
What are LDCs?
Less economically developed countries (Bangladesh), improving economies, primary education provision, less debts, economy moving into secondary sector
What are NICs?
Newly industrialised countries, fast growing economy in manufacturing/exporting, agricultural sector has shrunk, good educational investment, moved into the tertiary and Quaternary sector
What are RICs?
Recently industrialised countries
What are FCCs?
Former communist countries, middle income but many have stagnant populations, many have good natural resources (Russia - gas)
What are MEDCs?
More economically developed countries, developed tertiary/Quaternary sectors, manufacturing declining except in high tech products, most TNCs situated in these countries (USA), G8: group of the most powerful economies on the planet, excluding China
What are BRICs?
Brazil, Russia, India, china - 4 of the biggest 10 economies on earth and are increasingly a powerful group in world affairs
What is OPEC?
Organisation of Petroleum Exporting Countries, 13 members (inc. Saudi Arabia), very powerful, to be a member you must export more than you import
What is OECD?
Organisation for Economic Corporation and Development, 30 of the richest and most powerful countries, discuss political, social, economic and environmental problems
What are Trade Blocs?
Group of countries that make agreements to reduce barriers - this increases trade and improves cooperation between countries, usually involves reducing tariffs or taxes on imported goods
What are the benefits of Trade Blocs? name 2 examples
Access to a larger market, increased sales, buy raw materials in bulk so can negotiate discount, countries in agreement can focus on developing specific industries (UK - finance/banking, Italy - car manufacturing)
EU, NAFTA (North American Free Trade Agreement) - USA = capital, Canada = raw materials, Mexico = cheap labour
Name the 4 ways TNCs create links between countries
- Mergers: when two similar companies become one (EE) - creates links
- Acquisitions: when one company buts another (Ford buying Volvo)
- Using Sub Contractors: TNCs use foreign companies to produce their products (Apple use Foxconn)
- FDI: gives a TNC long term investment in a country (Nike in Vietnam)
What are the criticisms of TNCs?
Leakage - most profits head back to the HQ of the TNC
They are footlose and exploit economic conditions in countries and then move to more favourable conditions
They can exert political influence over governments in poorer countries
Describe a switched on place
Highly connected place and due to this; trade, money, people and information flow easily between them and other global hubs
Large consumers and producers of goods due to their strong connections
High ecological footprint and have a big impact on the environment due to their high levels of production and consumption
Name an example of a switched on place
Singapore - global hubs as a financial, manufacturing and tourist centre
Describe a switched off place
Poorly connected/remote areas - some money can flow into these places (aid) but there is little trade with other countries
Do not consume and produce due to being poorly connected to global networks, so are not potential markets for TNCs
Low energy usage and ecological footpring
Name an example of a switched off place
Bhutan in the Himalayas - landlocked so tourism and internet accesses is limited, economy is based on subsidence
How does techonology make the world interconnected?
Telecommunications (internet, air travel create global networks - e.g. Ryanair - cheap, accessible through internet, flies to range of destinations across Europe
Flight destinations become hubs and become connected and have multipier effect - boosting the local economy and becoming switched on
Trade can be encouraged and increase cultural exposure through visiting different countries
Examples of cities which have benefited: Riga in Latvia, Valencia in Spain, Bratislava in Slovakia
How have physical resources helped UAE become a global winner?
UAE = collection of oil states that derive their wealth from oil, the trade of oil and generate petrodollar wealth
Has physical coastal links and a developed international airport at Abu Dhabi
The money generated from oil gives comparative advantages and this can be used to develop other parts of the economy (manufacturing, tourism, service sectors) as well as investment in communication, infrastructure and education
Wealth can be invested abroad (Sovereign Wealth funds) and this develops connections
How have human resources helped India become a global winner?
RIC with 1.1bn people - this provides relatively cheap labour for manufacturing/service industry
Manufacturing has grown rapidly through investment of TNCs
Cheap educated and skilled labour means costs are reduced and productivity is high
India has a comparative advantage in human resources compared to China as it has a much younger, less dependent population
As more people are earning regular wages, more tax can be earned and these is a larger market for TNCs to invest and sell products in increasing connectivity
